Kimberly-Clark third-quarter profit tops view despite flat sales

Tue Oct 22, 2013 8:29am EDT

(Reuters) - Kimberly-Clark Corp (KMB.N) posted a bigger-than-anticipated rise in quarterly profit on Tuesday as the maker of Kleenex tissues cut costs to help mitigate the impact of flat sales.

Its shares rose 1.2 percent to $100 in premarket trading.

Kimberly-Clark also raised the low end of its 2013 adjusted earnings-per-share forecast by 5 cents, and now expects to earn $5.65 to $5.75 per share this year.

Kimberly-Clark earned $1.44 per share on an adjusted basis, which excludes restructuring costs, up from $1.34 a year earlier and 4 cents above analysts' forecast of $1.40, according to Thomson Reuters I/B/E/S.

Kimberly-Clark earned $546 million, or $1.42 per share, in the third quarter, up from $517 million, or $1.30, a year earlier.

While the company cut $70 million in costs, it also had to deal with $55 million in additional costs for raw materials and transportation versus the same period a year earlier.

Sales rose modestly to $5.26 billion from $5.25 billion.

Organic sales, which strip out the impact of acquisitions, divestitures and foreign exchange fluctuations, rose 5 percent. The volume of goods sold rose 3 percent and prices were up 1 percent.

Sales and operating profit declined in personal care, the company's biggest unit with products such as Huggies diapers and Depend and Poise incontinence products. Much of the sales decline in that business stemmed from Kimberly-Clark's decision to exit much of its European business.

Sales in the North American personal-care division were flat, as volume increased but prices fell 1 percent due largely to promotional activity in the diaper category, where Huggies competes against Procter & Gamble Co's (PG.N) Pampers and other brands.

Sales and operating profit rose in Kimberly-Clark's other units.

(Reporting by Jessica Wohl in Chicago; Editing by Jeffrey Benkoe and Maureen Bavdek)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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